Baltimore sells content security business

Says has enough money for next 12 months

Baltimore Technologies has secured a much needed cash lifeline with the sale of its content security business to UK software firm Clearswift Corporation for £20.5 million.

The deal represents a tiny fraction of the £692 million Baltimore paid for Content Technologies at the height of the stock market boom in 2000. It will receive £12 million in cash, £2.5 million in loan notes and the remainder as shares in Clearswift.

The sale is subject to Baltimore shareholder approval to be sought at an Extraordinary General Meeting in March.

As Baltimore now admits, there was little link between its core public key infrastructure (or as it now prefers to call it authentication and authorisation solutions) and content security. Recognising this, Baltimore's executives decided to dispose of this business when it was forced to restructure its business last year.

Dwindling cash reserves and disappointing sales of its core PKI technology have forced Baltimore to take a scythe to its business, after a string of disappointing financial results that have been accompanied to heavy job losses. Around 1,400 people worked for Baltimore at the start of the year but this will be cut to 470 by the second quarter of next year. Meanwhile Baltimore's share price has collapsed.

Baltimore now believes it has enough working capital for at least the next 12 months. ®